ORLANDO, Fla. (Reuters) - A Florida hospital on Monday
settled for $80 million to $90 million part of a federal
whistleblower lawsuit that accused it of Medicare fraud and
kickbacks to its cancer doctors and neurosurgeons, according to
a lawyer for the whistleblower.

Halifax Health, a 678-bed hospital in Daytona Beach serving
Florida's East Coast, reached the tentative settlement with the
U.S. Department of Justice on the morning that jury selection
was set to begin in the U.S. District Court in Orlando, said
Atlanta lawyer Marlan Wilbanks, who filed the lawsuit on behalf
of former hospital employee Elin Baklid-Kunz.

The settlement will be finalized before a judge next week.
It leaves intact a second part of Baklid-Kunz's complaint
accusing the hospital of pumping up its revenue by unnecessarily
admitting for overnight stays patients who could have gone home,
he added.

Wilbanks said those issues are set for trial in July and
carry potential liability for the hospital of up to $400
million, including $70 million in Medicare losses and penalties.

Lawyers for the hospital and the U.S. Department of Justice,
who prosecuted the case, did not return calls for comment.

"We understand where the information is coming from," said
hospital spokeswoman Tangela Boyd. "But nothing has been signed.
So we're not going forward (with a comment) until everything is
a done deal."

The case attracted national attention after Wilbanks said
the court allowed the whistleblower to pierce the hospital's
attorney-client privilege under the crime-fraud exception to the
law.

Baklid-Kunz worked for more than 15 years in financial and
regulatory compliance roles at Halifax Health. She filed the
lawsuit in 2009 under the federal False Claims Act, which
rewards those who report government fraud with up to 30 percent
of the proceeds.

After reviewing her claims, the U.S. Department of Justice
agreed to prosecute the hospital itself for what the government
called illegal "profit-sharing" plans with its cancer doctors
and neurosurgeons.

U.S. District Judge Gregory Presnell ruled in November that
the Halifax Health profit-sharing plan with the oncologists
violated the federal Stark Law, which prohibits hospitals from
billing Medicare for services in which the referring doctors
have an improper financial interest.

The judge had not yet ruled on the neurosurgeons'
compensation plan, or the extent of the damages, both of which
would have been at issue at trial.

Baklid-Kunz will continue to pursue her other allegations at
trial in July, including charges that the government was
overbilled for excessive spinal fusions performed by one
neurosurgeon, and for patient services performed by nurses or
physician's assistants but billed at doctor rates, Wilbanks
said.

The lawsuit claimed that the hospital's own internal
analyses found patients being admitted unnecessarily at rates of
up to 82 percent, depending on the diagnosis.

The case is United States of America and Elin Baklid-Kunz
vs. Halifax Hospital Medical Center and Halifax Staffing, Inc.
Case No. 6:09-cv-1002-Orl-31TBS